WA and China in Headlines

(A round-up from January 2017)

Dec. 5: Starbucks opens world’s largest Roastery in Shanghai

ABC News reported that Starbucks is opening its first international, 30,000 square-foot, flagship Starbucks Reserve Roastery in the heart of Shanghai’s upscale shopping street. The store has more than 400 employees and can serve up to 550 people at a time, ABC said. The Seattle Times also reported that the first Starbucks Reserve Roastery opened in its home city Seattle three years ago, but the Shanghai version is twice as large as the one in Seattle’s Capitol Hill. On Tuesday, ABC reported, crowds at the grand opening in Shanghai sampled fresh brews and watched beans being roasted on-site. "China represents the most important and exciting opportunity ahead of us,” ABC quoted Howard Schultz, Starbucks chairman. The company currently runs 3,000 stores in China and plans to open 5,000 by 2021. –WA China Watch Digest 12/05/17

The Chronicle reported that investigators led by the Grays Harbor County Drug Task Force executed 50 search warrants at suspected marijuana grow operations tended by Chinese nationals in Grays Harbor, Thurston and King counties last week, resulting in the confiscation of an estimated $80 million or more in plants. The raids resulted in 44 arrests, 26 vehicle confiscations, and the seizure of guns and other items of value. Investigators also found $400,000 in cash and gold and seized 32,449 marijuana plants. Illegal marijuana grows involving Chinese nationals in states that have legalized marijuana are becoming increasingly common, the report quoted Chief Criminal Deputy Steve Shumate, of the Grays Harbor County Sheriff’s Office. –WA China Watch Digest 12/02/17

South China Morning Post reported that Bill Gates has just been elected an academician of China’s top organization for scientists and engineers: the Chinese Academy of Engineering. Gates was elected not because of Microsoft, but for his role as founder and chairman of Washington state-based nuclear power company TerraPower, which has a partnership with the China National Nuclear Corporation to develop an advanced nuclear reactor. Gates was the only non-academic foreigner hand-picked by the CAE for its lifetime membership, along with other 17 newly inducted foreign scholars from the U.S., U.K, Japan and Australia. Foreigners are eligible if they have played an important role in promoting China’s engineering, science, and technology. --WA China Watch Digest 11/27/17

Nov. 22: Two Boeing 747 aircraft sold online in China

CNN Money reported that three Boeing 747 cargo aircraft went on auction this week on the popular online shopping site Taobao owned by Chinese internet behemoth Alibaba. Chinese logistics giant SF Express bought two of the planes for a combined total of more than $48.3 million, with the third 747 unsold. The three jets, according to CNN, had belonged to Jade Cargo International, a freight carrier that filed for bankruptcy in 2013. The report also said that this was the first time an aircraft of this size had been sold on Taobao, which has been selling light aircraft online since 2013. CNN asks if you fancy an airplane to go with your clothes, toys and groceries, as there is still one 747 cargo plane available. --WA China Watch Digest 11/23/17

Nov. 16: Chinese telecom giant Huawei moving headquarters to Seattle

Puget Sound Business Journal reported that Huawei, the Chinese telecommunications giant, was moving its consumer headquarters to Seattle. It mentioned that the office is led by Robin (Zhendong) Zhu, President of Huawei Device USA, which has been headquartered in Plano, Texas. Before this new office, Huawei already had three offices in the Seattle area: Huawei Technologies Remote Office in Kirkland, Huawei Device Remote Office in Bellevue, and Huawei Seattle Research Center in Bellevue. In 2012, Huawei and fellow Chinese telecom company ZTE were declared a security threat by U.S. House Intelligence Committee, which warned mergers and acquisitions in the U.S. by the two companies and encouraged private sectors to consider the long-term security risks associated with the two. --WA China Watch Digest 11/18/17

Nov. 10: China’s C919 one step further in challenging Boeing, Airbus

CNBC reported that China's domestically developed passenger jet C919 successfully completed its first long-distance flight, after flying for nearly 2 hours and 30 minutes from Shanghai Pudong before landing 800 miles away at Xi'an Yanliang testing base in the Shaanxi province. Having completed now six flights in total, CNBC said, the C919 would now move toward international certification. In fact, the report said, Europe's aviation safety regulator had agreed back in April to begin C919’s certification process. Viewed as a rival to Boeing’s 737 and the Airbus A320, COMAC (Commercial Aircraft Corp of China Ltd.) plans to produce six test aircraft, with the second expected to make its maiden flight at the end of this year. Among the 27 mostly Chinese clients for the C919 was the Irish-American GE Capital Aviation Services, with 10 firm orders and an option to buy 10 more. –WA China Watch Digest 11/11/17

Nov. 3: Boeing delivers first 737 Max 8 to Air China

Cision PR Newswire reported that Boeing and Air China celebrated the delivery of the airline’s first 737 MAX 8. As the national flag carrier, Air China is first airline in China to receive the model, the report said, customers throughout China would take delivery of nearly 100 737 MAXs by the end of next year. The report also quoted Rick Anderson, Boeing’s VP of Sales for Northeast Asia, “This delivery marks another significant milestone in our enduring partnership. We are confident that the 737 MAX 8 will play a key role in Air China's continued growth." The 737 MAX, which offers customers exceptional performance, is the fastest selling airplane in Boeing history, accumulating more than 3,900 orders to date from 92 customers worldwide. --WA China Watch Digest 11/05/17

Oct. 30: Northwest will have to handle more of its own recyclables with China’s new ban

Hal Bernton at the Seattle Times reported that China would roll out new rules in January that will ban imports of 24 types of recyclables and sharply restrict the amount of contamination in other imported waste materials. That, the report said, would increase processing costs in the U.S., including the Pacific Northwest. Brad Lovaas, executive director of the Washington Refuse & Recycling Association, was quoted as saying that means recyclers are having to slow down their sorting lines, to dramatically improve the cleanliness of baled paper and other products, making processing more expensive meet the new Chinese contamination standard and will have to send materials to landfills for lack of alternate markets. --WA China Watch Digest 11/03/17

Oct. 24: Chongqing tops world’s cities for fastest growth of tourism

CNBC reported that, according to latest report of World Travel and Tourism Council, the world's top 10 fastest growing tourism cities are all in Asia, with Chongqing, Seattle’s sister city in China, top the list, at 14% growth per year. Chengdu, capital of Sichuan, Washington state’s friendship province, was among the top 10, which also included Guangzhou, Shanghai, Beijing, Manila, Delhi, Shenzhen, Kuala Lumpur and Jakarta. CNBC quoted the report, "The strong Chinese domestic market is behind the growth of cities such as Chongqing and Guangzhou which rely on spend from Chinese nationals for 94.5% and 89.1% of their Travel & Tourism GDP respectively.” The study covered a total of 65 cities, chosen for arrivals and spending by visitors. –WA China Watch Digest 10/26/17

Oct. 22: Amazon in showdown with Alibaba in Asia

The New York Times reported that Amazon and Alibaba were competing against each other in Asia, aiming at the region’s growing young middle class going online. While Amazon has committed $5 billion in India, offering Prime service, Alibaba is focusing on Southeast Asia by investing $2 billion in Singapore and operating also in Vietnam, Malaysia and the Philippines. With projections from Google that Southeast Asia’s ecommerce sales could total $88 billion by 2015, Amazon and Alibaba are seeking to repeat China’s explosive transformation into the world’s biggest online shopping market. Times mentioned that while the two ecommerce giants had not been in much direct competition in the U.S. or China, Southeast Asia was the neutral turf where they test their business models on. --WA China Watch Digest 10/23/17

Oct. 12: Washington teacher in China donated organs after death, a first in Jiangsu province

China Daily reported that a 41-year-old American teacher in China died on Wednesday from a stroke, and his organs were donated. He was Amery Scott from Washington state and was an English teacher in Changshu city, Jiangsu province. Dr. Guo Qiang with the Hospital of Soochow University said that Scott’s kidney and corneas were given to Chinese patients. According China Daily, Scott’s mother, who was at the hospital, said his son had agreed to donate his organs when he applied for a driving license in the U.S., and that his son had made the right decision. According to Suzhou's Red Cross Society, Scott was and the first foreign donor in the history of the province. --WA China Watch Digest 10/13/17

Oct. 12: Baidu opening office here completes BAT in Greater Seattle

China News Service reported that on Oct. 10, Baidu opened its Seattle-area office in Bellevue, to support its AI research. Baidu president Yaqin Zhang, participating in the 2017 Geekwire Summit here in Seattle, said that AI was the single most transformative force of our time. Why Seattle? Zhang, in an interview with GeekWire, listed the reasons as “Talent, talent, talent,” and citing the region as the home of leading computer scientists and engineers, particularly in cloud technologies. Before Baidu, Alibaba, Tencent both had opened their office respectively in the region. With the three Chinese tech giants known as BAT, for Baidu, Alibaba and Tencent, China News Service, as all as many Chinese news outlets, carried this headline, “BAT is complete in Seattle.” --WA China Watch Digest 10/13/17

Caixin Global reported that after accepting WeChat Pay, the Tencent payment tool embedded in WeChat, since late 2016, all 2,800 of Starbucks’ China locations were now accepting Alipay, a payment platform owned by Alibaba. It was a move, the report said, that broke the WeChat Pay’s digital-payment monopoly at the popular coffee chain. The report also described it as the digital payment turf-war between Alipay and WeChat coming to Starbucks. It was also Starbucks playing catch-up, as most major restaurant chains and even many local eateries in China accepted payments via both WeChat Pay and Alipay, which combined control around 90% of the market share. --WA China Watch Digest 09/29/17

Sept. 22: China is building a nuclear reactor with design by TerraPower of Bellevue

Bloomberg Technology had this report, “Nuclear Experts Head to China to Test Experimental Reactors.” It said that China National Nuclear Power Co. had announced this month a joint venture to build and operate a “traveling wave reactor” in Hebei province. Partners include China National Nuclear Corp, Canada’s SNC-Lavalin, Shanghai Electric Group, and Oak Ridge National Laboratory. “China is where the demand exists and where willing partners exist for this kind of plan,” Bloomberg quoted Chris Levesque, President of Bellevue, WA-based TerraPower, which developed the traveling-wave technology and whose chairman is Microsoft founder Bill Gates. The report also pointed out that China was spending billions on new power plants across the energy spectrum, from coal and natural gas, to renewables and nuclear. --WA China Watch Digest 09/26/17

Sept. 22: Costco is predicted to build stores in China soon

CNBC reported that, according to a Baird analyst, the Issaquah, WA based Costco was on the verge of a bigger push into China, like building warehouse clubs there. The indication was the company’s launch last week of an official flagship store, with assortment of furniture, consumer electronics, and wine, on the “Tmall” platform, which is run by China's e-commerce giant Alibaba. The analyst explained that "Tmall" store launches required special permission to operate in the Asian country. Consequently, it likely meant that Costco now also had a license to build stores in China. Currently, in addition to North America and Europe, Costco already has stores in Asian countries, such as Japan, Korea and Taiwan. This Baird analyst also believed that COST's first physical store in China could happen within the next year or two, with Shanghai as the most likely location. --WA China Watch Digest 09/23/17

Sept. 14: Global Innovation Exchange opened its doors in Bellevue

The Seattle Times reports that GIX, the joint graduate institute by the University of Washington and Tsinghua University in China opened its building in Bellevue’s Spring District. At the celebration were Microsoft President Brad Smith, CEO Satya Nadella, former CEO Steve Ballmer, UW president Ana Mari Cauce, Tsinghua president Qiu Yong, Gov. Jay Inslee, and former governors Chris Gregoire and Gary Locke, and Luo Linquan, Consul General of China in San Francisco. 43 students from China and the U.S. will start classes in two weeks in its project-based, team-oriented master’s program. Students will pay $54,000 for the 15-month master’s program, or $77,000 for a 21-month program for two degrees — one from the UW, and one from Tsinghua. Times calls GIX as “designed to educate the next generation of entrepreneurs.” --WA China Watch Digest 09/15/17

Sept. 12: Boeing expanding its Shanghai aircraft maintenance services

Puget Sound Business Journal reports that Boing is ramping up maintenance, repair and overhaul activities at its joint venture facility in Shanghai. Boeing Shanghai Aviation Services, with its maintenance base at the Shanghai Pudong International Airport, recently completed its first C checks on a 787-8 Dreamliner jet belonging to China's Xiamen Airlines. A C check is an extensive check of an airplane's systems and components that can take several days. The Journal quotes Boeing Shanghai CEO Dermot Swan, “The successful completion is a testament to Boeing Shanghai’s capability in the 787 maintenance and modification market. We are very grateful for the confidence Xiamen Air has placed in our team.” Xiamen's Dreamliners fly between Seattle and Shenzen. --WA China Watch Digest 09/13/17

Sept. 11: Amazon hiring hundreds in China to compete with Alibaba

The Seattle Times reports that the Seattle-based Amazon.com is hiring big in China to fill almost 400 openings based there, ranging from software engineers to designers of Alexa to senior executives, to recoup some of the market share lost to Alibaba. The report says that while Amazon strikes fear into rivals around the world, in China it’s dwarfed by Alibaba. While Amazon still sells goods from abroad to Chinese consumers and has local cloud-computing customers, in a market dominated by Alibaba and JD.Com, it is now a bit player with its sales representing just 0.8 % of China’s online gross merchandise in 2016. But, the report continues, like fellow U.S. companies Facebook and Google, Amazon isn’t giving up on the world’s most populous nation, the world’s largest online shopping arena. --WA China Watch Digest 09/13/17

Sept. 6: Boeing estimates 7,240 aircraft purchases by China in next 20 years

Reuters reported that according to Randy Tinseth, Boeing Commercial Airplanes vice president of marketing, Boeing’s latest estimate was that Chinese airlines were likely to make 7,240 aircraft purchases, worth $1.1 trillion, for the period to 2036, 6.3% higher than Boeing’s previous prediction of 6,810 planes last year. Tinseth also said that China’s continuous economic growth, significant investment in infrastructure, growing middle-class and evolving airline business models supported this long-term outlook. “China’s fleet size is expected to grow at a pace well above the world average, and almost 20 percent of global new airplane demand will be from airlines based in China,” he added. Reuters also mentioned that in jostling for market share in China, Boeing and Airbus both are opening assembly plants in China. --WA China Watch Digest 09/08/17

Aug. 27: Amazon Prime not ready for prime time in China

The Wall Street Journal reported that with the competition from Alibaba and JD.com boosting offerings and dangling discounts, Amazon’s Prime membership, which it launched in China last fall, hasn’t gained much traction. The reported mentioned several areas as to why: one, membership programs are not popular in China; two, Amazon’s app for mobile phones lags behind Chinese competitors in ease of use and appeal; and three, Amazon’s main pitch – authentic Western goods shipped free from abroad – is being weakened as Alibaba and JD have similar offerings. As a result, the report said, according to Kantar Worldpanel analysis in June, Amazon had a 1% share of China's fast-moving consumable goods, unchanged from a year ago. --WA China Watch Digest 08/30/17

Aug. 24: Starbucks China success achieved around three pillars: family, community and status

Michael Zakkour, columnist at Forbes, wrote a piece on why Starbucks succeeded in China and what lessons all retailers could learn. In addition to its long-term commitment to the market, well-executed collaborations with Chinese partners, superior supply chains, adopting local technologies, and offering local items on its menu, etc., Zakkour said that it was the three key pillars of Chinese society that Starbucks has organized its efforts in China around: Family-- for instance, its annual Partner Family Forum, where its employees and their parents can learn together about the company and its future in China; Community--for instance, its welcoming laid-out for crowds, noise and lounging; Status--for instance, it has positioned itself as the brand and products portraying prosperity, success and upward mobility that the Chinese want to be associated with. --WA China Watch Digest 08/24/17

Healthcare Design reported that Columbia China (Shanghai, China), a 50-50 joint venture between Seattle’s Columbia Pacific Management and Singapore investment company Temasek, started construction this week on a 500-bed multi-specialty hospital in Zhejiang Province. The report said that Columbia Jiaxing Hospital, set to open in 2019, would cost US $150 million (RMB 1 billion) to construct and would be Columbia China’s second greenfield hospital. Columbia China currently operates Shanghai Kaiyuan Orthopedic Hospital (232 beds), two multi-specialty clinics, and three senior living facilities in Shanghai and Beijing. For more information, go to Columbia China website. --WA China Watch Digest 08/24/17

Aug. 19: Dean Yuanchun Shi calls GIX “Tsinghua Gone Out”

Xinhua News reported that on Aug. 18, Yuanchun Shi (史元春), dean of Global Innovation Exchange (GIX) Institute of Tsinghua University, talked to Xinhua about how GIX was new type education. As a professor of Computer Science, Prof. Shi told Xinhua that GIX, a joint venture with the University of Washington, was a new kind of international education and research platform, very different from the old model where Chinese students were sent abroad. GIX was the first effort of Tsinghua opening and running a new type of school in a U.S. city, in Bellevue, kind of like “Tsinghua gone out.” GIX is also different, she said, in programs it offers, with an emphasis on frontier technology and interdisciplinary studies. As for teaching staff, Shi said they would come from Tsinghua and UW as well as business companies. She also called GIX a new milestone for Tsinghua in international education. --WA China Watch Digest 08/20/17

Sina reported that on Aug. 17, Ofo, the leading bike sharing service from China and the world's first and largest "station-free" bike-sharing platform, officially launched its service in Seattle with 1,000 of its signature yellow bikes. It was said to be the first Chinese bike sharing service that received a permit from local authorities, the Seattle Department of Transportation. Ofo offers smart locking and Adyen payments platform. Started in 2014, Ofo is now in seven countries, including the UK and the U.S. In Seattle, Ofo joins Spin, with orange bikes, and Limebike, with green ones, as the third bike sharing service, all part of the SDOT pilot program. --WA China Watch Digest 08/20/17

CNBC reported that JD.com, China’s No. 2 ecommerce giant after Alibaba, was having a successful partnership with American retail giant Wal-Mart. Since entering a partnership in 2016, both companies have been working to integrate their platforms, inventories and customer resources in China. Chinese shoppers are now able to purchase U.S.-made products from Wal-Mart stores from JD's online platform directly, and the JD is able to offer 30-minute delivery services. CNBC quoted JD.com International President Winston Cheng, “We bring, clearly, the online traffic to Wal-Mart," which is “offering space in their stores for our inventory…” “We're integrating with Wal-Mart in a much tighter partnership, which ... potentially, Amazon might do with Whole Foods.” --WA China Watch Digest 08/13/17

Puget Sound Business Journal reported in two stories over two days, here and here, that former Governor Chris Gregoire, as CEO of Challenge Seattle, is trying to create one regional economic development organization by merging and consolidating various individual economic development groups. Such a new organization will market the region, promote international investment and trade with China for the broader Puget Sound Region or the tri-county region. The consolidation could include Trade & Development Alliance of Greater Seattle and the Washington State China Relations Council. But the China Council President Mercy Kuo, after a meeting with the former governor, told the PSBJ that her organization will remain independent, but will support any new economic development organization. Kuo also said in an email to the Digest that the Council would hold a board meeting on the issue on Thursday, Aug. 10. Stay tuned. –WA China Watch Digest 08/08/17

Aug. 1: Amazon’s cloud service in China bows to government censorship

The New York Times reported that days after Apple removed anti-censorship tools off its app store in China, Amazon’s cloud computing service operator there, Beijing Sinnet Technology, also began implementing the country’s new tougher restrictions on online content. The company told its customers in emails to cease using any software that would allow them to circumvent the country’s extensive system of internet blocks, also known as the Great Firewall. To tighten controls on China’s internet, NYT said, the government recently shut down a number of Chinese-run VPNs, Virtual Private Networks. In addition, in cloud computing, China requires foreign companies have a local partner and restricts them from owning a controlling stake in any cloud company. –WA China Watch Digest 08/04/17

July 27: Starbucks out of joint venture to own all Starbucks in China, with pressure or confidence

Janet Tu at the Seattle Times reported that Starbucks agreed to purchase the remaining 50% of its joint venture business in China for $1.3 billion and to assume 100% ownership of about 1,300 stores in east China, including Shanghai. According to Tu, Starbucks currently has 2,800 stores in China and already owns 1,500 of them. She quoted Kevin Johnson, Starbucks’ president and CEO, as saying that unifying the Starbucks business under a full company-operated structure in China reinforces its commitment to the market and demonstrates its confidence in the local leadership team as Starbucks aims to grow from 2,800 to more than 5,000 stores by 2021. Bloomberg reported, however, it was Starbucks’ biggest stock decline in almost two years, its slowing growth in the U.S. and its defeat in running Teavana stores that pressured it to accelerate growth in China. --WA China Watch Digest 07/28/17

July 22: A first: Chinese Provinces–Washington State Trade and Investment Forum

People’s Daily reported that the “Chinese Provinces–Washington State Trade and Investment Forum” was held in Seattle on July 20th. Attendees were Lieutenant Governor Cyrus Habib, State Commerce Director Brian Bolender, China’s Department of Commerce’ Director for Foreign Trade Sun Chenghai, China’s Commercial Consul Yihang Yang in San Francisco, along with 200 government and business representatives from both the U.S. and China. The Chinese cities and provinces represented were Shanghai, Guangdong, Liaoning, Shaanxi, Hunan, and Beijing. Industries represented were Advanced Manufacturing, Aviation, Information Technology, Agriculture, Medical Care, Pharmaceutical, Photovoltaic and Food Processing. Mercy Kuo, president of the Washington State China Relations Council, a collaborated on the event, wrote about it in Diplomat. –WA China Watch Digest 07/24/17

July 16: Chongqing Party Chief Sun Zhengcai removed, suddenly

Bloomberg, along with many news outlets, reported that Sun Zhengcai, Communist Party Secretary of Chongqing, Seattle’s sister city, was removed last Saturday, July 15, and put under investigation for violating party regulations and severely damaging the party’s interests. In 2012, it was Bo Xilai, the previous Party chief of Chongqing, that was ousted in another Party reshuffle. Sun, a rising star, was not only Chongqing’s Party chief, but also the youngest member of the Politburo, that, Bloomberg said, could have set up him for a top leadership post after 2022. The Central Commission for Discipline Inspection did issue a statement in February saying the Chongqing municipality fell short of “clearing toxic residue” from Bo’s era. This is all ahead of the 19th Party Congress to be held later this year. – WA China Watch Digest 07/18/17

July 12: Global Innovation Exchange ran into “Mandarin” problems

Nuoya Zhou at the Puget Sound Business Journal reported that in preparing to launch this fall the first master program of GIX, Global Innovation Exchange, jointly with Tsinghua University of China, UW ran into some snags. “There is a whole set of politics going on in Mandarin, in Beijing, all the time,” the article quoted David Maddox, GIX Chief Operating Director. One example Maddox gave was how the anti-corruption campaign launched by China’s President Xi Jinping limited the ability to move money out of China. More than 40 students, according to Zhou, most of them from the U.S. and China, but also from other countries, will join the first class this fall at the new campus in the Spring District in Bellevue. Enrollment will double next fall. –WA China Watch Digest 07/17/17

Hal Bernton at the Seattle Times had two stories from Shenzhen, China in two days. In his first story, Bernton talked about electric cars and buses built by BYD of Shenzhen, the world’s largest manufacturer of electric cars and buses, China’s 7.3% drop of coal consumption since 2013, and China now as the biggest producer of renewable energy. Burnton also pointed out, however, coal still generates 64% of China’s energy, compared with 17% in the U.S. In his second story, Burnton talked about Wu Lebin, chairman of the multibillion-dollar CAS Holdings and man behind the joint venture NW Innovation Works to build at the Columbia River Port of Kalama a $1.8 billion plant that would make methanol from North American natural gas rather than the coal that is the feedstock in his nation. Again, as Burnton also mentioned, Pacific Northwest environmentalists have campaigned to keep the region from becoming a hub for exporting fossil fuels to Asia. --WA China Watch Digest 07/07/17

June 24: 120 in Sichuan buried in mountain village landslide

The Seattle Times posted AP report that more than 120 people, 62 homes, a hotel and a mile of road were buried by a landslide in Xinmo village of Mao County in Sichuan, Washington’s sister province, early Saturday, with huge rocks coming from a mountain, and a mass of earth, crashing down. A rescue team official said this was the biggest landslide to hit this area since the Wenchuan earthquake, which had happened as China’s deadliest earthquake this century in May 2008, killing nearly 90,000 people. AP report also said, according to Sichuan provincial government website, an estimated 8 million cubic meters of earth and rock — equivalent to more than 3,000 Olympic-sized swimming pools — had slid down the mountain. --WA China Watch Digest 06/25/17

June 22: China contributed half of Boeing’s 571 orders won at Paris Air Show

Xinhua News reported that during the recent Paris Air Show, American aviation giant and Washington’s own Boeing broke the record in the history of the show by landing 571 orders and commitments, with a total value of $74.8 billion, compared with Airbus’ 326 orders at $18.5 billion. Boeing’s newly launched 737 Max 10 won 361 of those orders from 16 global customers. Of the total 571 orders, Xinhua said, Chinese companies contributed about half, as Xiamen Airlines, Ruili Airlines, China Development Bank Financial Leasing Co. and others ordered 275 planes, including 737 Max and 787-9. Other Chinese companies that ordered Boeing aircraft in Paris included China Aircraft Leasing Group and Tibet Financial Leasing. --WA China Watch Digest 06/23/17

June 9: Northwest Innovation Works got approval for methanol plant in Cowlitz County

Hal Bernton at the Seattle Times reported that the China backed joint venture Northwest Innovation Works received a key shoreline permit this week by the state Department of Ecology for their $1.8 billion Cowlitz County methanol plant. The plant in Kalama will produce methanol from Western natural gas and ship the chemical to China to be used as a feedstock in the plastics industry. The project was lauded by Gov. Inslee as one of the most innovative clean-energy efforts in the nation but opposed by environmental groups for safety risks and other concerns. The permit is conditional, according to Bernton, that the plant would have to offset — or find ways to reduce — carbon emissions. --WA China Watch Digest 06/11/17

June 4: California and Sichuan form new friendship state/province ties

While Washington and Sichuan have been friendship state and province since 1982, Sina News reported that California had just formed the same relationship with Sichuan this past Sunday. Governor Jerry Brown, on his visit to Chengdu, signed the agreement with Governor Yi Li of Sichuan. Brown had first met Sichuan Communist Party chief Wang Dongming in 2015 in Seattle at the U.S.-China Governors Forum during President Xi Jinping’s visit, and the two signed a MOU on the relationship. At their Chengdu ceremony, Wang and Brown said CA and Sichuan would cooperate in IT, AI, biology, medicine, clean energy, new energy vehicles, environment, climate, education, and culture. Sichuan Online reported that Intel, HP, Apple and other California companies were already in Sichuan while 25 Sichuan companies had invested in California. --WA China Watch Digest 06/04/17

May 31: 2017 SyScan360 Information Security Conference held in Seattle

Guangming Online reported that the 2017 SyScan360 Information Security Conference, hosted by Qihoo 360, China's largest Internet security company, was held in Seattle from May 30 to 31. Representatives from global tech giants like Microsoft, Google, Intel, McAfee and Pangoo participated in the conference and delivered speeches covering several fields of security including vulnerabilities research. SyScan (The Symposium on Security for Asia Networks) has been one of the most prestigious Internet information security events since first inaugurated in 2004. This was the first time the event was held in the U.S. --WA China Watch Digest 05/31/17

May 23: Microsoft offers Chinese government version of Windows 10

Matt Day at the Seattle Times reported that Microsoft has built a version of Windows 10 tailored for China’s government and state-owned corporations, baking into the operating system greater control for administrators and a pledge to not send any system usage data outside of the country, as announced by Terry Myerson, executive vice president of Microsoft’s Windows and Devices unit, in Shanghai. The new version was jointly developed by Microsoft and state-owned China Electronics Technology Group. One reader with the handle “user1047648” commented, “Wow, congratulations Mr. Gates. This, one day after we learn that China killed all our CIA operatives.” --WA China Watch Digest 05/24/17

May 23: Hainan is buying $4.2 billion worth of Boeing jets

Andrew McIntosh at the Puget Sound Business Journal reported that Hainan Airlines, which offers direct flight from Seattle to Beijing, Shanghai and Shenzhen, announced in its filing with the Shanghai Stock Exchange that it would be buying 19 Boeing Co. passenger jetliners in a deal worth $4.2 billion, which will include 13 Boeing 787 Dreamliners and six Boeing 737 Max 8 jets. McIntosh also said to meet the surging demand of the rapid growth in China’s consumer travel market, China is building 74 new airports by 2020, increasing the country's total number of airports to around 260 and that China will become the world’s largest air travel market by 2024. --WA China Watch Digest 05/24/17

May 22: BGI founder Jian Wang attending 2017 Microsoft CEO Summit

China Finance Online reported that Jian Wang (汪建), chairman and founder of BGI, the genomics research giant, visited the U.S. west coast from May 16-18 and joined 140 other global leaders in business and technology in attending the 2017 Microsoft CEO Summit. He met with Bill Gates, Warren Buffet, Governor Jay Inslee, UW President Ana Mari Cauce, UW Medicine CEO Dr. Paul Ramsey, and Dr. Linda Buck, Nobel laureate and Fred Hutch researcher. Jian Wang was also here to launch the new BGI Global Innovation Center in Seattle and San Jose announced a few days ago. --WA China Watch Digest 05/22/17

May 18: T-Mobile victorious in law suit against Chinese smartphone maker Huawei

Seattle Times reported that T-Mobile emerged victorious in its long-running lawsuit filed in 2014 against Chinese smartphone maker Huawei in federal court in Seattle this week. A jury decided that Huawei misappropriated trade secrets belonging to T-Mobile, especially of the robot, Tappy, developed to test smartphone functions. While the jury said T-Mobile should be awarded $4.8 million in damages, it also decided that Huawei’s misappropriation was not “willful and malicious” and did not award any damages from the trade-secret claim. The damages it did award under the breach of contract allegation was a small fraction of what T-Mobile had requested, according to Huawei spokesman. --WA China Watch Digest 05/19/17

May 17: BGI to co-locate new West Coast Innovation Center in Seattle, San Jose

GeekWire reported that BGI, genomics research giant based in Shenzhen, China, announced its new Global Innovation Center co-located between Seattle and San Jose. With its new Seattle office officially opened last December, GeekWire said, BGI already works with the UW on precision medicine, the Bill and Melinda Gates Foundation, the Allen Institute for Brain Science, as well as WSU in Pullman, with a focus on health and agricultural research. GeekWire quoted Dr. Jian Wang, BGI founder and chairman, “The idea is really to stimulate the innovative collaboration or partnership between BGI and research institutions, universities, and potentially biotech industries in the U.S.” --WA China Watch Digest 05/19/17

Apr. 28: Tencent to open new AI research center in Seattle

TechCrunch reported that Tencent, Chinese tech conglomerate, owner of WeChat, the company behind China’s largest social network and the world’s biggest online games business, would be opening a new AI research center in Seattle. The company has long had a core office in Palo Alto, but this would be its first major machine intelligence R&D effort in the U.S. Earlier last week Tencent also announced that it would open its first data center in Silicon Valley. Yu Dong, formally of Microsoft Research, is said to be leading the U.S. effort. TechCrunch also said that Tencent, Baidu, Alibaba and other Chinese tech companies were competing for AI talent with Google, Microsoft and Facebook on their home turf. --WA China Watch Digest 04/30/17

Apr. 13: GIX announces Innovation Competition 2017

Global Innovation Exchange, of University of Washington and the Tsinghua University, announced in both Beijing and Seattle the launch of its Innovation Competition 2017. The first GIX innovation competition was held in 2016 in Beijing. The theme will be “Connected Devices,” including IoT, wearable devices, intelligent hardware, virtual and augmented reality, etc. Candidates will be teams with up to three members who are either college degree students or have graduated within five years. Each team will work with an assigned a mentor, a technical expert. There will be three rounds of competition, June 21, July 12 and Sept. 15 when winners will be selected from final six teams in Seattle. –WA China Watch Digest 04/16/17

Starbucks Chairman Howard Schultz and Starbucks China CEO Belinda Wong announced in Beijing that the company established an unprecedented critical illness insurance plan for the parents of its eligible full-time employees in company-operated stores in Mainland China and would begin offering it June 1, 2017. Called “Starbucks China Parent Care Program,” the plan will benefit over 10,000 parents of its employees there. Wong said that culturally parents played an important role in the lives and career choices of its China employees. Schultz said that supporting critical illnesses for aging parents exemplified what Starbucks believed as its responsibility as a global public company and honored the family values deeply-rooted in the Chinese culture. The company has nearly 40,000 employees, called partners, at its 2,600 stores across 127 cities in China. --WA China Watch Digest 04/12/17

Radio Free Asia reported that a court in Chengdu, Sichuan, Washington state’s sister province, had handed down last Friday a four-year jail term to veteran rights activist Cheng Yunfei, who had been detained after visiting the grave of a 1989 Tiananmen massacre victim in 2015. He was convicted of "picking quarrels and stirring up trouble," a charge increasingly used on peaceful dissent and criticism of the Communist Party. On his one-day hearing, according to Radio Free Asia, Chen appeared in his pajamas and said it was easier that way to dream “the Chinese dream,” as in President Xi Jinping's slogan. Chen rejected the verdict and sentence, RFA quoted Chen’s lawyer. –WA China Watch Digest 04/04/17

Mar. 28: Chongqing citizens to be punished for using Virtual Private Networks

Channel NewsAsia reported that the government of Chongqing, Seattle’s sister city, announced earlier last week its updated internet security regulation. Under the new rules, anyone in the megacity skirting censorship controls by using VPNs would receive punishment. VPNs help users to jump over China’s “Great Firewall” that blocked websites such as Google, Facebook, and Twitter. Fines will range from a warning to disconnect from the internet. Those who make a profit of more than 5,000 yuan while using VPNs will be fined 5,000-15,000 yuan. Channel NewsAsia said the national VPN crackdown and the Chongqing campaign were part of a “China solution” to global cyber governance. –WA China Watch Digest 03/31/17

Bill Gates, an honorary trustee at Beida, or Peking University, gave a speech to students there: “My Advice for China’s students.” Gates praised China’s achievement in reducing poverty at home and helping other countries with similar challenges, China’s potential and its greater role. He then talked about four areas he thought there were exciting opportunities for Chinese students to use their education and passion to unlock more amazing progress for both China and the world: health, agriculture, energy, and technology. Gates also mentioned how Microsoft’s Beijing lab was the biggest outside the U.S. and how he was a big fan of table tennis. Full text of his speech in English is available on his Gatesnotes blog as well as in Chinese on his WeChat account. --WA China Watch Digest 03/25/17

Mar. 22: Mark Calhoon: Governor Inslee will stop in Chengdu, Sichuan in August

It was first revealed by Brian Bonlender, Director of the Washington State Dept. of Commerce, on March 15 at the Washington State China Relations Council banquet that Governor Inslee was planning to visit China this August. Mark Calhoon, Senior Managing Director at the Commerce, confirmed the news with WCWD. “Tentatively the mission is being planned for early to mid-August,” Calhoon said in an email. Would Governor go to Sichuan, our sister province? “The itinerary would likely include a stop in Chengdu, as part of the sister relationship with Sichuan.” Would there be another 100-member strong delegation like in 2013 the last time Governor went to China? “Not sure this time, since August would be prime vacation season for a lot of people.” Stay tuned. –WA China Watch Digest 03/23/17

Mar. 17: Boeing to help CAAC of China in airspace management

ATW, Air Transport World, reported that Boeing signed a MOU with Civil Aviation Administration of China’s (CAAC) Air Traffic Management Bureau in an effort to alleviate increasing air traffic congestion in China. Boeing will provide professional expertise to CAAC in the key fields of airspace management, flow management, aviation data, communication, navigation, surveillance, meteorology, general aviation and training. ATW quoted Boeing China president John Bruns that “This MOU reaffirms our longstanding relationship with the CAAC’s Air Traffic Management Bureau and highlights Boeing’s expertise in the aviation services industry with airspace and air traffic management solutions.” –WA China Watch Digest 03/18/17

Mar. 14: Ford to make Lincolns in Seattle’s sister city Chongqing

Daily Caller reported that Lincoln Motor Company, a division of Ford, would start producing cars in Chongqing, China, Seattle’s sister city, in 2019. The company is aiming to compete against GM, seize a larger share of the world’s largest auto market, especially for luxury cars, with 30% growth per year, and avoid China’s 25% import tariffs. The U.S., in comparison, has an import tax of only 2.5%. However, Daily Caller said, foreign car companies cannot construct factories on Chinese soil without a joint-venture partner. In this case, Ford will produce Lincolns in cooperation with state-owned Changan Automobile. Daily Caller called this “unfair trade practices.” --WA China Watch Digest 03/18/17

Mar. 12: Boeing Zhoushan China plant to make first delivery by end of 2018

NetEase News reported that Boeing’s new 737 completion plant in Zhoushan, Zhejiang province, China, would start construction by the end of March, be ready for use in May and make its first delivery by the end of 2018. On March 10, 75 aviation companies from China and abroad gathered in Zhoushan, all hoping to follow Boeing and get in on the fast development of aviation industry there. They visited the Putuoshan airport renovation site as well as the Zhoushan aviation industry park, where the Boeing-Comac joint-venture 737 completion plant to locate. The plant would do interior installation, painting, maintenance and delivery of 737Max. In full capacity, it would deliver 100 planes a year, creating 2,000 jobs. --WA China Watch Digest 03/12/17

Feb. 27: Alibaba now in “3A” race of cloud - AliCloud, AWS, Azure

Financial Times in this story talked about how Alibaba was now in a cloud computing race of the 3As: AliCloud, AWS (Amazon Web Services), Azure (of Microsoft). Alibaba, based in Hangzhou, China, with an office in Bellevue, entered the cloud computing business in 2009, three years after Amazon launched its cloud division, AWS. Even though AliCloud’s revenues reached $254m in its latest quarterly reports, compared with AWS’s $11bn sales last year, it has got 41.5% of China’s rapidly growing market share. Total spending on public cloud services in China is forecast to rise from $11.2bn in 2016 to $14.2bn this year, FT quoted a research. “The potential for Alibaba on cloud is the same as AWS,” another researcher said. –WA China Watch Digest 03/12/17

Feb. 21: Juneyao Airlines of China ordering five 787-9 Dreamliners

Andrew McIntosh at the Puget Sound Business Journal reported that the Shanghai-based Juneyao Airlines had just ordered five Boeing 787-9 Dreamliners, valued at about $1.32 billion at list prices. Juneyao Airlines Chairman Wang Junjin said, according to the report, the airline would use its new Dreamliners to open new routes to North America, Europe and Australia by 2020. The private carrier Juneyao Airlines, started in 2006, is Boeing’s latest Chinese customer, after China Southern Airlines, China Eastern Airlines, and Air China and others. In China, Juneyao Airlines, according to its website, is called 吉祥, or Lucky Airlines. --WA China Watch Digest 02/23/17

Feb. 19: Microsoft Asia head says cloud opportunity in China huge

CNBC reported that Ralph Haupter, president of Asia at Microsoft, said that decision-makers in the region were looking for ways to digitally transform their businesses to tap into artificial intelligence, the Internet of Things, mixed reality and wearable devices. Microsoft data centers in 13 regions across Asia Pacific, that support Microsoft's public cloud, Azure, grew revenue by 93% in 2016. In China, Microsoft partners with U.S.-listed 21Vianet, with data centers in Beijing and Shanghai. "China obviously is a huge opportunity that's defined by size (and) acceleration of innovation... high demand and digitization," CNBC quoted Haupter. --WA China Watch Digest 02/21/17

Feb. 15: China Council announces Mercy Kuo its new president

The Washington State China Relations Council announced, finally, its new president, Mercy Kuo, and its new chairman, Andrew Wilson, whose appointment was revealed earlier on Council website. According to media release, Kuo has a Ph.D. in Modern History from Oxford University, authored Contending with Contradictions: China’s Policy towards Soviet Eastern Europe and the Origins of the Sino-Soviet Split, 1953-1960; a columnist on U.S.-Asia policy at The Diplomat, a former director of research at the Committee of 100, and a former director of the Southeast Asia Studies and Strategic Asia Programs at the Seattle-based National Bureau of Asian Research. Kuo would be the second female in this position after Kristi Heim and second Chinese American after Eden Woon. --WA China Watch Digest 02/17/17

Andrew McIntosh at the Puget Sound Business Journal reported that Richard Aboulafia, senior aerospace analyst with Teal Group in Washington, D.C., said Boeing would suffer in a trade war while Airbus would be the biggest beneficiary. Speaking at the Pacific Northwest Aerospace Alliance (PNAA) annual conference in Lynnwood, WA, Aboulafia also said the Chinese airplane maker Commercial Aircraft Corporation of China (COMAC) just wasn’t ready for prime time. However, Abloulafia said the great boom was over for all passenger jet manufacturers. At the same time, there is an explosive market for spy planes and defense products. –WA China Watch Digest 02/17/17

Feb. 13: Bill Gates says hello and welcome in Chinese to his new WeChat fans

Wall Street Journal reported that Bill Gates had just launched over the weekend his new account on China's most popular social media WeChat, with the ID “gatesnotes.” In a 30-second opening video, Gates said “Hello and welcome to my WeChat account” in Chinese to his new WeChat followers. By late Monday, the report said, it had drawn more than 100,000 views and over 9,000 “likes.” Mr. Gates will use his WeChat blog to share his thoughts on people he meets, books he has read and lessons learned, with topics ranging from health to energy and resources. Earlier, in 2010, Gates opened an account on Weibo where he has 3.2 million followers. One thing Bill Gates regrets, however, the report said, is that he “was never becoming conversant in any foreign language.” --WA China Watch Digest 02/14/17

Feb. 7: Seattle the new Vancouver for mainland Chinese homebuyers

Wall Street Journal said in this story that the 15% tax the Canadian province of British Columbia imposed on foreign investment in the city last August made Seattle red hot among Chinese home seekers. While web searches in China for Vancouver properties dropped 37% in December compared with a year ago, searches for Seattle properties jumped 125% year-over-year in November. One Windermere Real Estate agent said, for an open house for a new $2.3 million listing in the Seattle metro area, all twenty groups of buyers visiting the property were Chinese. The report also said, Mike O’Brien, a Seattle City Council member, was exploring measures, including a vacancy tax, in this regard. --WA China Watch Digest 02/09/17

Jan. 30: Author says China’s dream C919 can’t compete with Boeing

Trefor Moss at the Wall Street Journal posted a piece, “China’s Jetliner Dream Is Still on the Tarmac.” Moss started with an under the hood look of China’s prototype, single-aisle, 158-seat, jetliner C919 set to make its maiden flight early this year: it bristles with technology from elsewhere, such as General Electric Co., Honeywell International Inc. and other U.S. suppliers. Developed by the state-owned Commercial Aircraft Corp. of China, or Comac, C919 flight tests are expected by the end of March. Moss quoted Derek Levine, author of "The Dragon Takes Flight," a study of China's aerospace sector, "It's 15 years behind," “an antiquated plane that can't compete with Airbus and Boeing." --WA China Watch Digest 01/31/17

Jan. 26: Sidney Rittenberg talks about solitary confinement in China, and more

Sinica, now part of SupChina, a China news site, posted a podcast interview of Sidney Rittenberg, a Washingtonian and the most seasoned China watcher in America. Sinica said on its webpage: “Sidney Rittenberg is a labor activist from Charleston, South Carolina, who went to China as a translator for the U.S. Army in 1945 and stayed until 1980. In this episode, Sidney talks about the conditions he endured during his two periods of solitary confinement, Sino-American relations, and much more.” This is part two of a longer podcast. Sinica also published earlier a Q&A with Sidney Rittenberg, whose new book “Manage Your Mind: Set Yourself Free” came out last year. --WA China Watch Digest 01/30/17

USA Today reported in the story “Made in China — and straight to your Amazon box” how Amazon helped Chinese merchants sell on the site, opening a new way for Chinese factories and vendors to easily get their products to the U.S. Instead of shipping products to the U.S. and then finding warehouse space here to process, package and mail from, Chinese sellers can hand over much if not all of the processing and shipping to Amazon. Products are easily sent from Chinese producers to Amazon fulfillment centers in the U.S, where they become part of Amazon’s two-day Prime program. Teikametrics, a company that provides data analytics, said there are about 200,000 Chinese sellers on Amazon right now. --WA China Watch Digest 01/27/17

Jan. 24: WSCRC lists Andrew Wilson as new board chair, with new president coming soon?

It appears that the Washington State China Relations Council is about to announce its next president. Along with its brand new website and new dark blue background of its home page is the name T. Andrew Wilson, listed as the new chairman of the board, replacing Michael Rawding. Andrew Wilson, former Senior Director of Corporate Development at Intellectual Ventures and a vice chair at the Council since 2013, drew attention last December when he was interviewed on Fox News in a piece titled “The First 100 Days: Trump vows big changes for trade with China.” When asked about a possible full-blown trade war with China, Wilson said, "The strength of what's happened over the past decades is we have interdependent economies, we trade both ways. The downside is there is pain that can be inflicted both ways.” So new website, new chairman, can a new president be far? --WA China Watch Digest 01/24/17

Mike Rosenberg of the Seattle Times reported that Shilan Zhao, who had lived in Newcastle, pleaded guilty in U.S. District Court in Los Angeles to EB-5 visa-fraud charges, which included her use of stolen money from China to purchase her house on the Eastside. She will forfeit her $900,000 house in Newcastle and give up properties worth tens of millions of dollars in California and New York, and will also spend up to five years in federal prison. Zhao was first arrested in Seattle in March 2015. She and her ex-husband Jianjun Qiao, a former Chinese government official, had lied about the source of their EB-5 investment and about their marital status. Qiao is still on the lam, the report said. --WA China Watch Digest 01/12/17

Jan. 6: Bloomberg Gadfly says Boeing could survive a China trade war

It was bad enough, Bloomberg Gadfly columnist David Fickling wrote, that Boeing got into a fight with the president-elect over the cost of Air Force One, Donald Trump’s talk of punitive measures against Chinese exports was particularly bad news, as Boeing’s China business would be vulnerable to retaliation. However, Fickling pointed out that while Boeing earned more than $5 billion in annual revenue from China, the 292 undelivered aircraft ordered by Chinese airlines made up just 5.5% of Boeing's total outstanding orders. The Chinese carriers were holding fire until China starts producing its own C919 in competition with the 737. In that sense, Fickling said, the trade war has already begun for Boeing. --WA China Watch Digest 01/07/17

China’s Central National Radio reported that construction of a new aviation industrial park in Zhoushan would start in March where the Boeing 737 completion plant is to be located. Boeing announced the location of Zhoushan last October. In December, Zhoushan Aviation Investment Co. Ltd. was formed to manage the investment, development and construction of the new Zhoushan Aviation Industrial Park. The park will have two areas, aviation operation and aviation manufacturing. The Boeing Zhoushan center itself will be two parts, a joint venture 737 completion plant between Boeing and COMAC (Commercial Aircraft Corporation of China ), and a wholly-owned Boeing 737 delivery center. According to CNR, the plant and facilities would be ready for Boeing by the end of April, 2018. --WA China Watch Digest 01/03/2017